History of engineering education in Nepal can be traced since 1942, when Technical Training School was established. Engineering section of the school offered only trades and civil sub-overseers programs. In 1959, Nepal Engineering Institute, with the assistance of the government of India, started offering civil overseer courses leading to Diploma in Civil Engineering. The Technical Training Institute established in 1965, with the assistance from the Government of Federal Republic of Germany, offered technician courses in General Mechanics, Auto Mechanics, Electrical Engineering and Mechanical Drafting..
In 1972, the Nepal Engineering Institute at Pulchowk and the Technical Training Institute at Thapathali were brought together under the umbrella of the Tribhuvan University to constitute the Institute of Engineering and the Nepal Engineering Institute and the Technical Training Institute were renamed as Pulchowk Campus and Thapathali Campus respectively.
Since then, the Institute of Engineering has expanded considerably. The technician programs in Electrical, Electronics, Refrigeration/Air-conditioning Engineering were started in the Pulchowk Campus, with the assistance from UNDP/ILO in 1972. The Architecture Technician program was started by the IOE in its own effort in 1973. As first Bachelor's Degree level c ourse in Engineering in Nepal, B. E. Civil Engineering was started in 1984 in its own effort. In 1994, with the assistance of the World Bank, the Swiss Government, and the Canadian Government, Bachelor Degree level courses in Engineering were extended to Electronics & Communication and Electrical engineering and, in 1995 Mechanical engineering and Architecture were started in the Pulchowk Campus. From the academic year 1998/99 Bachelor's Degree program in Computer Engineering, from 2001, Bachelor's Program in Agriculture Engineering was started at Purwanchal Campus. In 2006, Bachelor's Program in Industrial Engineering, and in 2015, Bachelor's Program in Automobile Engineering was started at Thapathali Campus.
From the year 2014, all the diploma programs are phased out and the IOE has concentrated its programs spanning from Bachelor through Master to Ph.D levels.